2024-02-15 08:25:31
The queen of cryptocurrencies exceeded $51,000 this Wednesday and its surge seems to continue. The asset is doing much better than in 2022.
Forgotten the recent scandals or a new era thanks to new investment products authorized in the United States? Bitcoin, at its highest level in two years, rose above $50,000 this week and seems set to continue its rise.
Early Wednesday followingnoon, the most important digital currency reached $52,053, a new high since December 2021, and on the same day exceeded the milestone of $1,000 billion in capitalization, according to the Coingecko platform. Its price has soared by more than 20% since the beginning of February and has more than tripled since January 2023.
If the price of bitcoin has not returned to its historic record of November 2021, at nearly $69,000, it has largely recovered since the collapse of its prices at the end of 2022, in the wake of the sinking of several giants in the sector.
Arrival of new ETFs
Analysts put forward two main factors to explain the new surge in prices. First, the effects of a new investment product, a bitcoin index fund (ETF), which offers investors the possibility of placing their money in these funds depending on the performance of this digital asset, without having to directly hold of bitcoins.
Once the green light was given by the policeman of the American markets, the SEC, the launch of this new type of investment propelled bitcoin beyond $49,000 on January 11, before prices fell back a little. Anxious to recover their stake, some investors had in fact made massive withdrawals from the GBTC fund (Grayscale Bitcoin Trust), which already existed before being converted into an ETF and accumulated more than $28 billion in assets.
In order to meet redemption requests, Grayscale had to sell part of its bitcoin holdings, which had cooled investors. But “this initial wave of exits” has now “dried up”, and optimism has returned to the bitcoin market, which has returned to the peaks, notes James Harte, analyst at Tickmill.
Fear of missing out
This event occurs approximately every four years and the next one is scheduled for April. It is expected to slow the speed at which new bitcoins enter the market, reducing the cryptocurrency’s potential availability for purchase and boosting its value. Especially since the digital currency already has a finite number of units: its creator Satoshi Nakamoto has limited the maximum number of bitcoins in the world to 21 million.
Sometimes brutal movements
This attraction is reinforced by the prospects of imminent rate cuts from major central banks, which increase the appetite for risk in the markets. But the analyst urges caution, because although market sentiment remains extremely positive, he recognizes the “volatility and uncertainties” of a sector where investors’ assessments can change quickly depending on market performance or evolution of regulations.
The bankruptcies of several giants of the sector including the cryptocurrency trading platform FTX had undermined investor confidence and led to a collapse in prices at the end of 2022. In 2017, a previous cycle of exuberant enthusiasm had already been followed by a collapse classes. Central banks and regulatory authorities continue to call for caution in the face of this highly speculative market.
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